I would like to ask for few thinks regarding import in foreign currency
let me bring you to the scenario I’m operating in
I have a business in South Africa, I import goods from Poland for which I pay in EURO, I’m transporting the goods in two stages, first one is courier from Poland and I’m paying him in USD, second one is in South Africa and I’m paying him in ZAR, to complicate the whole situation I have 60 day account with my Polish supplier and 30 day account with the Polish Courier, the South African bank charges for the forex transactions extra for each transaction, the true reflection of the exchange costs are only visible after the money is gone from the account. Please tell me if, it is possible to set up somehow the manage to reflect true cost of products in ZAR if I order from my supplier in Poland.
Yes it is possible but when you say “goods” are you talking one or multiple of inventory items.
Possibly the simplest way would be only to take up the transactions when the money leaves your bank account so all amounts are in ZAR as the exchange rate between invoice date and payment date would vary and therefore causing adjustments.
If the transport invoices are being paid prior to the inventory invoices, then those payments would be posted/held in a BS - Asset - Transport Clearing account and would be re-allocated once the inventory invoice is paid.
When the inventory invoice is processed you would add two extra account lines:
The first one would be to add the transport costs as “Freight In” to the Inventory, and
The second one would be to post the transport costs as a negative value to the Transport Clearing account so they are cleared from there.
The way I handle this type of thing is very similar to @Brucanna suggestions, but perhaps more simple.
I do not feel the need to micro-manage cost details to a very fine degree, but I do need to account for losses and gains when paying in or being paid in foreign currencies.
In my BS, I have a have an account “Currency Gains/Losses”, and I post the value of the difference between the initially entered cost and the final actual cost to that account.
Periodically, I journal the balance of that account out to the P&L to reflect a more true trading position, effectively treating it as part of the general and overall make-up of my costs and overheads. - - - Overall, I find that sometimes I win and sometimes I loose…
In turn, my bank makes separate individual charges for foreign currency transactions (over and above my normal bank charges) which are thankfully separately shown on my bank statements. I simply record these to ‘Bank Charges’ in my P&L, and again treat them as part of the general and overall make-up of my costs and overheads.
As I said above, personally I do not feel the need to be particularly detailed in the analysis of these types of costs, but I imagine if you wished to, you could readily use the “Tracking Code” facility in Manager if you wished to carry out any further reporting and analysis of them.
Keeping track of “Currency Gains/losses” is more micro-managing then not tracking them at all.
Your “Currency Gains/Losses” account should reside in the P&L so you always have a true trading position - depending on the balance (credit/debit) you “could” change the account group between Income or Expenses.
Not sure how Tracking Codes would be useful in the purchasing of Inventory.
Point well made, and probably very true.
The OP did not mention ‘inventory’ and neither did I.
True again, but I find that the values I deal with do not make much of a difference to the overall picture, and are never ever material at any time, it’s just that I have to do something with them in order to get things to balance-up
Not inventory specifically, but did mention “I import goods” and “to reflect true cost of products”.
Of course they could be talking of acquiring Fixed Assets, but still not requiring tracking codes
Putting them in the P&L solves you having to do anything to get things balanced up.
My bank charges don’t make much of a difference either at 0.0001% of expenses but that doesn’t mean they go to the BS for later re-allocation
Thanks everyone for their input, but I think that we somehow misunderstood one another. I wont to know the real cost of product and at present I’m using Excel to do that, I have there an estimated cost and the real cost, so I know how much I’m gaining or losing, I just thought it was somehow possible to do that without excel. there I simply take the amounts I have payed in ZAR and divide them by the amount in EURO to get the exchange factor and multiply it by by the cost of each product. I thought it was possible to do something similar in Manager
Hi there
“Yes it is possible but when you say “goods” are you talking one or multiple of inventory items”
Goods are multiple items on the order/invoice and multiple of line items
I am no specialist on this but if I understand it correctly then under Setting - Base Currency - set that to ZAR. Now you can go and Edit your Supplier to EURO. Then for the date of the Invoice go to Setting - Exchange Rates and enter the rate EURO/ZAR. Now process your Purchase Invoice in EURO amounts and the Inventory will be converted to ZAR. Read Here
Note: for each new Invoice add a new exchange rate, DON’T edit an existing one as that will change previous invoice calculations. Set up a Test Business and try a few transactions out.
Normally the Freight-In feature can be entered as one line and Manager will spread the cost over multiple items but that’s in the same currency. As yours Freight-in’s are in USD & ZAR, perhaps those amounts need to be converted into EURO for the Inventory Invoice processing - some again use the Test Business with some transactions
Thanks for that I have read it already
let me explain the whole thing in more details
i would create purchase order in EURO - that’s no problem and items purchase prices are in EURO than I will get transport invoice in USD and than I will get clearing, VAT and duty invoice in ZAR
so far it is fantastic. I have to create a purchase Invoice for each of those transactions correct?
the payments are to different suppliers. from accounting point of view accurate. bank charges are bank charges regardless where they are. Tell me please what about the inventory purchase price, if I want to be accurate than i have to do something about it the purchase price is dependent on all of those previous transactions and the stock value is in ZAR. So I hope now you can see where my problem lies. this whole exercise is to get the correct invoicing but also a correct stock Inventory purchase price, before I just used the estimated purchase value, but that was my initial meaning regarding the multiple currencies and goods
adding something extra to the original purchase invoice in other currency is also impossible.
I’m looking for some solution to marry those 3 invoices to one stock cost and than spread it over to each item.
there is also VAT payed on the border which is didaktable and should be accounted for
Yes, and I clearly understood your situation from your first post. So we will work through this together but I need to know the following:
Have you set your base currency to ZAR
Have you edited your Supplier to be EURO
Have you edited your Courier to be USD
Also, via Private Message can you send me PDF’s of the three invoices that are linked. I will build them into a test company so I can illustrate the processes as we work through the steps.
This will be a nice to know process Brucanna thanks for bringing it up jacekm 
Hi Brucanna
Thanks for the response
Answering your questions
I have set the base currency to ZAR
Supplier currency to EURO
Courier currency to USD
Clearing agent to ZAR
I also have set the extra TAX CODE for 100% VAT on import
My products are set as purchase price in EUR and retail in ZAR, since purchase order goes to my supplier,after purchase invoice was created I have adjusted the EUR to ZAR ratio (exchage rate) as well to give me the correct price paid in ZAR
By this I am assuming that you adjusted the Purchase Invoice’s exchange rate to match the bank’s payment exchange rate - which is ok…
Have you also entered the Courier and Clearing Agent invoices and posted them to a BS Asset - Transport Clearing account ?
I will do it today, post them both to that account
I have done this so both of the transport invoices are sitting now in Transport Clearing account
What I have spotted that on the Clearing agents Invoice Import VAT can not be selected to 100% Import VAT, if I do that then the Transport clearing account will not contain that portion
OK, so on that invoice you need to do a couple of extra entries - read below
Brucanna
OK, so on that invoice you need to do a couple of extra entries - read below
Hi Brucanna
what extra entries you talking about because I think I’ve lost you
Like I’ve stated before if I select the portion of VAT for 100% VAT than this part does not appear on BS if I don’t assign it to the 100% vat than the thing is correct on BS
This is without VAT being asign
if I do it with full VAT
OK, lets just clear up this VAT situation first so that we have the same understanding.
When you say VAT 100%, is this the same as when you say VAT on Import ?
The BS account - VAT on Import, did you create this account in the Chart of Accounts ?
When you run a VAT report, does it pick up your VAT on Import values ?
Once this is cleared up we can move on to re-allocating the Transport Clearing
PS: Do you don’t to add “account” after Transport Clearing.
Yes this is the same VAT and it should be calculated as a VAT
[quote=“Brucanna, post:19, topic:6903”]
The BS account - VAT on Import, did you create this account in the Chart of Accounts ?
[/quote]That’s correct I have created it in the Chart of Accounts